With investors from overseas contemplating the full effects of the decision recently taken to leave the EU, we are seeing massive outflows of investment from overseas speculators holding property based assets in the UK.
With the pound sitting not so pretty around 1.17 to the euro, the impact of Brexit has been immediate. The UK has always been an attraction for property investors all over the world from China to Abu Dhabi. Property investors have always had a romance with own prime property in areas such as London, Manchester and Birmingham.
With the UK decidedly leaving the European Union, those investors are concerned and rightly so. Though dropping prime assets so soon may be seen to be premature as the UK has yet to negotiate trade deals and the final makeup of Brexit for better or worse is yet to be seen.
Most commonplace is that when a currency is on the decline, you can expect foreign speculators rushing in to buy up those cheaper assets with their own currency. Of course the value of the pound dropping is not going to make property appealing in this scenario.
As a reverse effect we are seeing huge inflows of investment into German property assets, no doubt investors are seeking to rehome their capital.
It is fair to say that most of the panic selling has now somewhat subdued. Though a major effort is taking place in central Europe to crown somewhere else as the financial capital of the EU, seeing as London will no longer be fit to serve.
Germany is an attractive alternative and with their property assets performing above average for investors globally, it could be that we are to see and hear more of Germany and their success in the property business. Frankfurt is likely to be considered as the new financial capital of Europe, though it is still way too early to say exactly how this will take place.
Many of the service sector jobs at banks and financial institutions will have to move as EU rules will require the employees are domiciled in the European Union. Frankfurt and Paris are expected to capture the majority of these industry relocations.
While very little change is going to take place for a good number of years, there are companies and institutions taking steps right now to relocate to cities inside the remaining 27 member countries.
FJP Investment is a team of investment specialists sourcing a wide range of alternative property investments both in the UK and overseas. Products include the Bar Works coworking Investment.
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